Nokia to transfer 800 employees to TCS, HCL Tech, cut 300 jobs

BANGALORE: Troubled phone maker Nokia on Thursday announced restructuring of its IT organization, which includes transfer of 820 of its employees to India's HCL TechnologiesBSE 4.21 % and Tata Consultancy ServicesBSE 0.94 %.

Nokia also plans to reduce its IT organization by up to 300 employees. The company has been working with Noida based HCL Technologies for over 5 years. Nokia said it will offer its employees affected by these planned reductions both financial support and a comprehensive 'Bridge support' program. The Finnish company said these are the last anticipated reductions as part of Nokia's focused strategy announcement of June 2012. "We believe these changes will increase operational efficiency and reduce operating costs, creating an IT organization appropriate for Nokia's current size and scope," said a Nokia spokesperson.

 The majority of the employees affected by these planned changes are based in Finland. Nokia said it is beginning the process of engaging with employee representatives on these plans in accordance with country-specific legal requirements.

The company has been losing market share globally to Samsung and Apple, which has plummeted its profits in past few years. Global mobile phone shipments is likely to grow at a much slower pace of 2% this year, as per a report by Credit Suisse, cannibalised by tablets and phablets (hybrids between phones and tablets) and slower consumer buying. In the third quarter of 2012, Samsung led the world smartphone market with a 23% market share, followed by Nokia at 19.2%. The Korean mobile phone maker beat Nokia to grab the title, last year, which Nokia held for over 14 years. Nokia, which tied up with Microsoft to adopt its Windows Phone platform for its smartphones, is relying on its Lumia series of phones, to bail itself out. Nokia shipped 4.4 million Lumia devices in the fourth quarter of 2012, bringing its total smartphone shipments to 6.6 million devices. In India, the company leads in overall shipments with about 22% share but lags in smartphones segment with only 19% share. Samsung leads India smartphone market with about 41% share. NYSE-listed Nokia's shares which were trading at $5.5 a piece till a year ago have declined about 18% in a year to about $4.5.   Economic Times